CALPASC Views Insurance Commissioner's Release As Warning To Rural Contractors - You Can't Escape The Law

SACRAMENTO, Calif., June 26, 2014 /PRNewswire/ -- This week's arrest of a plumbing contractor in Humboldt County revealed the reach of local and state agencies' efforts to expose and prosecute unscrupulous contractors. The California Professional Association of Specialty Contractors (CALPASC) considers the California Department of Insurance's (CDI) press release a clear warning that even rural contractors cannot fly under the radar of enforcement agencies working to level the playing field for law-abiding contractors.

According to CDI's release, Tim Shelley, owner of Tim's Plumbing in Eureka, was arrested on felony charges of workers' compensation insurance fraud and grand theft following a joint investigation by CDI and the Humboldt District Attorney's Office. The investigation revealed Shelley "deliberately failed to obtain workers' compensation insurance for his employees" and "discouraged [injured employees] from claiming workers' compensation benefits," resulting in significant financial hardship for them. Shelley also was accused of removing warranty tags from customers' water heaters and turning in false claims to obtain free replacement units from manufacturers. If convicted, he faces up to 18 years in state prison and fines of up to $260,000.

The following comments can be attributed to CALPASC's Director of Risk Management Bruce Wick:

"We greatly appreciate the collaboration among Insurance Commissioner Dave Jones, his investigative personnel and the Humboldt County District Attorney's Office. It is unconscionable to not provide the basic protection of workers' compensation for employees. It is even more atrocious when employees are denied medical treatment for injuries sustained.

"Providing workers' compensation insurance is not an option…it's the law. And when contractors, like Shelley, disregard the law, both employees and legitimate contractors pay the price."

The following comments can be attributed to Dynamic Plumbing Holding Company, Inc.'s Vice President and Chief Financial Officer Mike Mahony:

"Having to compete against dishonest contractors is particularly offensive for contractors who pay their workers' compensation premiums and take care of injured employees.

"And stealing consumers' warranty protections makes this a very egregious case. It is appropriate that this contractor is feeling the full force of the law".